Deadline looms to use federal foreclosure money

Ross D. Franklin / The Associated PressAuctions, bank owned homes, foreclosures, and unfinished housing developments dot the housing landscape like this Phoenix home in 2008. Little of the money given to local entities by the federal government to help with forclosures has been used.Cities, counties and states are having trouble spending some of the $4 billion given to them by Congress to help buy up abandoned homes and properties.

A Housing and Urban Development report finds that a third of more than 300 local governments that got money during the foreclosure crisis have barely made a dent in it a year later.

With the money came rules that some local officials say were confusing and often changed, making it hard to spend the cash. And the houses they did look to buy were often grabbed out from under them by better bids.

Now time is closing in, with a use-it-or-lose-it deadline looming just a few months away. The money will be gone if governments don't commit it to projects by September.